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| UK 100 Leaders | Close | Chg | % Chg | % YTD |
| Tesco PLC | 344.6 | 8.7 | 2.6 | 2.56 |
| Diageo PLC | 1925.5 | 39.5 | 2.1 | 7.75 |
| Sage Group (The) PLC | 340 | 6.8 | 2 | 15.53 |
| BAE Systems PLC | 403.3 | 7.6 | 1.9 | 19.71 |
| Meggitt PLC | 532 | 6 | 1.1 | 39.16 |
| AMEC PLC | 1012 | 11 | 1.1 | 0.9 |
| Associated British Foods PLC | 1761 | 18 | 1 | 12.6 |
| Morrison (Wm) Supermarkets PLC | 267.4 | 2.7 | 1 | 1.67 |
| UK 100 Laggards | Close | Chg | % Chg | % YTD |
| Aggreko PLC | 1660 | -92 | -5.3 | -4.6 |
| United Utilities Group PLC | 692 | -34.5 | -4.7 | 2.75 |
| Severn Trent PLC | 1696 | -69 | -3.9 | 7.75 |
| Polymetal International PLC | 614.5 | -23.5 | -3.7 | -47.7 |
| Eurasian Natural Resources Corporation PLC | 223.4 | -6.2 | -2.7 | -21.34 |
| Fresnillo PLC | 1045 | -28 | -2.6 | -43.42 |
| Tate & Lyle PLC | 818.5 | -16.5 | -2 | 7.41 |
| Kingfisher PLC | 348.6 | -6.5 | -1.8 | 22.7 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 6,348.82 | -25.39 | -0.4 | 7.65 |
| UK | 14,010.40 | 16.01 | 0.11 | 13.22 |
| FR CAC 40 | 3,839.34 | -21.21 | -0.55 | 5.45 |
| DE DAX 30 | 8,197.08 | -32.43 | -0.39 | 7.68 |
| US DJ Industrial Average 30 | 15,112.20 | -206.03 | -1.35 | 15.32 |
| US Nasdaq Composite 100 | 3,443.20 | -38.98 | -1.12 | 14.03 |
| US S&P 500 | 1,628.93 | -22.88 | -1.39 | 14.22 |
| JP Nikkei 225 | 13,014.58 | -230.64 | -1.74 | 25.20 |
| HK Hang Seng Index 48 | 20,430.22 | -556.67 | -2.65 | -9.83 |
| AU S&P/ASX 200 | 4,758.40 | -102.98 | -2.12 | 2.36 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, US Light Sweet ($/barrel) | 96.76 | -1.02 | -1.04 | 5.41 |
| Crude Oil, Brent ($/barrel) | 104.565 | -1.52 | -1.43 | -6.03 |
| Gold ($/oz) | 1342.5 | -3.3 | -0.25 | -19.88 |
| Silver ($/oz) | 21.03 | -0.09 | -0.43 | -30.69 |
| Platinum ($/oz) | 1411.75 | 3.35 | 0.24 | -8.57 |
| GBP/USD – US$ per £ | 1.5443 | – | -0.2 | -4.92 |
| EUR/USD – US$ per € | 1.3252 | – | -0.23 | 0.4 |
| GBP/EUR – € per £ | 1.1653 | – | 0.03 | -5.38 |
Click graph to enlarge
See Live Macro Calendar for full data line-up, incl. consensus expectations
UK 100 called to open -100pts at 6255, with another negative reaction (like last month) by global markets to the US Federal Reserve’s update on stimulus and its Chairman Bernanke’s testimony, which for a second month strayed/elaborated from prepared statement and spooked markets with a more hawkish tone.
Last night Bernanke suggested QE3 could end mid-2014, with tapering towards end-2013, based on a more optimistic economic outlook derived from recent improvements in the labour markets and macro data.
The reaction suggests markets don’t believe in; 1) US growth; 2) that US growth can survive ex-QE3; 3) that the Fed will stop at the right time; 4) in Fed’s new more optimistic projections. It also suggests markets believe and end of QE3 means rate rises just round the corner, potentially choking US consumption and growth.
A few points to consider. Will US unemployment really be around 7% by mid-next year (currently 7.6%, +0.1% last month)? Tapering and an end of QE3 remains – as it has done for months – hinged on economic data continuing to improve. All data to garner much attention; prepare for continued volatility until year-end.
If markets are so uncertain about US/global growth, QE3 could continue for longer, with both tapering and rate rises pushed further out. Fed just continuing to manage expectations? Keep an eye on how much the phrase “If the economy improves/if the data allows” continues to be ignored? (not guilty).
As if Bernanke’s speech wasn’t enough, HSBC Flash China PMI Manufacturing of 48.3 missed consensus 49.1 overnight, ticking back from 49.2 prev – a second month of contraction and a 9-month low. China & Hong Kong weak on this news as well as the surge in money market rates as the PBOC fails to address the cash crunch, in effect tightening credit conditions. Australia weak on China HSBC PMI reading.
In focus today, lots of data which could swing sentiment with Eurozone PMI Manufacturing and Services, with all but Germany seen in contraction (can it make it back to breakeven?), although all seen improving. UK Retail Sales seen accelerating in May, and CBI orders improving although prices flat. With end of QE3 in crosshairs, all US labour now watched so watch US Jobless Claims.
Eurozone Consumer Confidence seen a touch improved. US Philly Fed seen improving a few points and US Existing Home Sales seen showing same growth as in April.
Watch the UK banks Lloyds and RBS after UK Chancellor Osborne signalled the former closer to re-privatisation (‘actively considering’) but that the latter still a concern (‘urgent investigation’) and is weighing the prospect of a good bank/bad bank split but it would need EU state-aid approval.
UK 100 back testing levels last seen on 13 Jun and mid-April. Are we set for a return to April lows around 6200 as markets price in less central bank support. Rising lows broken at 6360 could become resistance for any recovery.
In FX, GBP/USD fallen back sharply on stronger USD on prospect of end of QE3 being in sight. Back below 1.55 from recent highs of 1.575. Note April/May lows 1.50.
EUR/USD also back form highs of 1.34 to test below 1.325. Still a fight between relative strength of US and Europe. USD/JPY rallied to 97 on USD strength.
Gold back below $1350 (May 20 lows) on stronger USD, benign inflation and less safehaven demand.
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